Friday 15 March 2024

Neutral Nuisance

A unique scenario in the Europa Conference League last night as Olympiacos became the first team in European Competition spreadsheet history, i.e. since 2004, to overcome a three goal deficit from the First Leg.


It's not uncommon for a team with a comfortable lead from the First Leg to lose, but previously losses have never prevented the team from advancing.     

Maccabi Tel Aviv were handicapped by having to play their "Home" Leg in Serbia and after winning the First Leg 4:1 in Greece, they proceeded to lose 1:6 at "Home" in the Second Leg after extra time - the score was 1:4 after 90 minutes.

Backing the draw following a goalless First Leg is usually a bad idea, but the Viktoria Plzeň and Servette Second Leg also finished 0:0 and these results meant that the Rounds of 16 across all three tournaments resulted in a loss of 0.82 units although some subscribers may have skipped the Neutral venue game, a scenario I'm ashamed to admit the Sacred Manuscript author didn't consider.

After a rare visit to my Spam folder, I found a very pleasing email from someone who calls himself 'Anonymous fan.' My bad that the email was sent almost one month ago, but he wrote:
Hey Cassini,

Thank you for your work and your blog. I really appreciate everything you do. I have been messing around with killer sports since you introduced me to it and I have a lot of fun thinking about things that may matter for the sports I enjoy.

I think I may have found an intriguing one for NHL.
I won't reveal the find, which does look very interesting, but the most pleasing part of it is that this blog apparently does sometimes achieve one of its objectives, i.e. encouraging readers to explore ideas of their own.

I haven't talked about NHL much this season - the systems in the Sacred Manuscript are both boringly in small profit territory, the Basic by just 0.2% and the Premium by 2.5% - but Anonymous fan's discovery blows these numbers away with an ROI of 17.8% this season, and all time of 8.7% since 2006 and a total of more than 1,000 selections. 

Anonymous Fan explained his rationale and concluded his email with:
It seems to be steadily profitable year after year, present a solid number of plays, and the games that meet the criteria are typically quite enjoyable to watch. I am not very good at math or statistics though so maybe it is too small a sample? Either way I was curious to get your thoughts.
I ran the numbers through Joseph Buchdahl's "Testing Your Betting Model" spreadsheet:

and the 1-in-x probability came out to 8032. Very impressive, and with a selection last night I dipped my toes in the water and was rewarded with a winner. 

Thursday 14 March 2024

Second Legs and Big 6 Cup Ties

I mentioned on Tuesday that:

The Champions League Round of 16 closes this week with four second leg matches remaining, and to date, fewer than 17% of these matches end as draws, an implied price of 6.07. In matches where both clubs are from one of the Big 5 Leagues, the numbers are fewer than 15% and 6.69.
The strategy for the Round of 16 matches in the sacred manuscript made a profit of 2.01 units and while Laying The Draw isn't one of my usual strategies, in certain Second Leg matches in European competitions, it's a profitable way to play. 

Here are the numbers for backing the Draw in the Second Leg of the the early rounds of the knockout stage for the three tournaments:
Things change as the tournaments progress however, and Laying The Draw is not a strategy to follow in the next rounds. 

The markets for Second Leg matches also appear to offer value when the First Leg finished 0:0. We only have 84 such matches in our European sample from 2004, but backing the Draw has a negative ROI of -43%. This is also a trend that is seen in the English domestic game with the 19 games here showing an ROI of -47%

I also took a further look at how Big 6 matchups played out when the teams meet in the late stages of domestic cups (FA Cup Quarter-Finals, Semi-Finals and Finals, League Cup Semi-Finals and Finals, and Community Shield games) and the Draw over 76 matches has an ROI of 39%. Manchester United host Liverpool in the FA Cup Quarter-Final this weekend, with the visitors currently odds-on favourites.

In earlier rounds of the FA Cup, there have been 20 Big 6 ties since 2004-05 and not a single Draw which is quite surprising. I've not looked at the League Cup earlier rounds, but I suspect the big clubs don't take this competition too seriously until they get close to the Final, but I'd have thought the FA Cup would be given a little more respect!  

There have also been 27 all-Big 6 matches in Europe, and the ROI on the Draw here is 11%   

I plan to expand the European Club Competition section of the Sacred Manuscript with my Second Leg findings, and anyone subscribing at this late stage of the 2023-24 season will automatically get the updated document for the 2024-25 season for free. 

Tuesday 12 March 2024

Big Draws, Second Leg Draws, and Bitcoin

As I mentioned last week, backing the Draw in "Big 6" matches this season has been rather rewarding, and the Liverpool v Manchester City game on Sunday boosted the bank even further, with the biggest surprise perhaps that the starting price was around 4.0 on Betfair, although I could 'only' get matched at 3.95. Pinnacle's Closing Odds had the Draw at 3.9. 

In the "Big 4/6" era, the league matches between these two clubs are the best of the 15 combinations for the Draw historically with an ROI of 50% from the 30 games played. Chelsea against Manchester United is second at 43% with Arsenal - Liverpool games next at 27%. With an ROI of -51%, the Manchester Derby is the worst bet. 
Of the 30 Home / Away combinations, the single best fixture is Manchester City v Liverpool at 58%, closely followed by Chelsea v Manchester United at 56%.

As most readers will be aware, the European Club tournaments next season will use a Swiss system format in place of the traditional Group stage. In a cosmetic change, the UEFA Europa Conference League will drop the 'Europa' from its name, but the knockout stages will remain in place almost unchanged. I say almost, because the Champions League will have an extra knockout round for a place in the Round of 16.

All this is good news as my data goes back to the 2003-04 season, and as I only get interested once the knockout rounds begin, the changes should mean that the data should continue to be valid. It would be a shame if 21 years of data (1,968 matches) were to become worthless due to a format change, but this shouldn't be the case.

The Champions League Round of 16 closes this week with four second leg matches remaining, and to date, fewer than 17% of these matches end as draws, an implied price of 6.07. In matches where both clubs are from one of the Big 5 Leagues, the numbers are fewer than 15% and 6.69.

It's been a good year for Bitcoin and this month it's up another ~15% so far and setting new highs. Unfortunately my purchase timing - almost two years ago -  wasn't great, but my patience has been rewarded and I have no plans to sell. 

The approval of the Bitcoin spot ETFs appears to be the main driver of this current run up, but there's a second event coming up that is also likely having an impact.
Inflows to the ETFs hit an all-time high last week, seeing nearly $680 million of inflows in one day. This means that the funds are buying more Bitcoin every day, which is eating away at the liquidity provided by sellers.
The second event is the imminent 4th Bitcoin halving (expected date is April 19th) which doesn't refer to a halving of the amount of Bitcoin in circulation and therefore has no effect on the balance on any wallet but refers to the reduction of mining rewards for adding a new block to the blockchain.
At this point in time, there are about 19.5 million Bitcoins that have already been mined, while the maximum supply is fixed at 21 million Bitcoins. Considering all upcoming halvings every 210,000 blocks (~ 4 years), the last Bitcoins will be mined around the year 2140. Consequently, in the next 16 years only 1.5 million Bitcoins will be created, which underlines that the remaining inflation is very marginal from a technical standpoint.

Hopefully I'll still be around in 2140. although this blog likely won't be! 

Thursday 7 March 2024

Shadow Chasing and Mindset Shifting

I'm a little bit late with this update, but February was an interesting month. It had the extra Leap Day this year, which to salaried employees like myself is a slight irritation as it's a day we don't get paid for, but that wasn't what made it interesting.

As I mentioned before, I started the ball rolling on one of life's big decisions, i.e. retirement, and March could be an even more interesting month, although I'm not sure how quickly such a ball gathers momentum, nor which slot on the wheel of life it will ultimately land in. 

Given a few recent issues with the company - there are significant "cost pressures" and "financial headwinds" and the share price, which had its first annual loss in 15 years in 2023 is already down almost 10% year-to-date - as well as contractors being let go later this month, it doesn't seem too far-fetched to believe the rumours that some full-time employees are also likely to be made redundant in the not too distant future. Best case scenario is that I can negotiate an enhanced individual severance deal sooner rather than be one of many lumped together in a layoff deal later in which the terms are unlikely to be open to negotiation. 

I first entered the workforce on 11th August 1975, which I don't need to add was a very long time ago. One of the places my work has taken me over the years was the state of Arkansas where I spent a few years in the 1990s, and I shall be returning there later this month for a five week visit. 

The primary reason is to be in the path of totality for the total solar eclipse on the 8th April, but I shall also be meeting up with my son who has a work trip in Wisconsin which overlaps, and he's keen to visit the area where he spent a few of his early years before moving back to the UK. 

In addition, I still have a few good friends in the area and it will be fun to catch up with them again, and I also plan to rent a bike while I'm there as cycling trails are now plentiful there. This blog will therefore have its longest sequence of silence since its debut in 2008, also a long time ago, at least as far as sports investment / betting blogs go.  Whether the trip ends up being a workation or a vacation remains to be seen but having heard today that there has been a significant number of resignations follow the annual reviews, though none (yet) from my team, I rather suspect that I shall not be receiving an offer.

As for February, well in sports investing it was rather a quiet month. The NBA season had its usual interruption at this time of year for its All-Star Break but when there were games, it was a good month overall with a 41-28-1 record ATS for the basic system, which is a 59.4% strike rate and for the season to date the percentage is 52.2%. The Overs had a small loss, but at 53% overall for the season, we're still in good shape here too, with the number to beat 51.2%.

Disappointingly, after a strong January, the NHL system dipped into the red after their All-Star Break and is now down 3.43 units, an ROI of -0.9%. February is usually a strong month but this year was the worst since 2007. It happens.

The "All-Big 6" League Cup Final was a winner of course and for those of you backing the Draw in "All-Big 6" League matches also this season, at the two-thirds point of the season there are worse things you could be doing since this is now +28.87 units (144%) and the strategy is guaranteed to finish the season in profit. 
Note that the Pinnacle overround is creeping back up again as it did in the COVID affected 2019-20 season, a number that is higher in matches involving a Big 6 club than in those "Little 14" games. 

The small number of matches each season means there will be some big winning and losing ROI percentages, but overall a 12% ROI over the last ten seasons (with ten matches to go) is very good.

Meanwhile over in Italy the Serie A System is performing well and while the ROI is "only" 8.4% from 720 games, it's worth paying attention to.
We're getting close to some more big games. The European Knockout rounds are here, and the end of season Finals and playoff games aren't too far off either with the Euros the icing on the cake.

Overall February was a good month for the main spreadsheet, with a new end-of-month high ending the 23 month wait. March hasn't started particularly well, but it's early days and a drawdown of 0.4% is nothing compared to the 23.4% from March two years ago. Bitcoin set a new all-time high this week, and is currently up 72% this year.  Tesla isn't. 

As for health and fitness, without which there is no point being concerned about money, it's mostly good news. I joined a gym at the start of February (good news) and have been there just three times since (not so good news). I much prefer being outdoors and have been out on my bike a few times and my walking / running still exceeds six miles a day on average. Dry January was followed by an almost Dry February with just one drinking day, and the pounds have been falling off - hopefully fat rather than muscle - and I am now down by more than five and a half stone (78.4 lbs to be precise) from my high in 2019. 
Similar to the financial mindset change needed to adjust for a move from earning and accumulation to retirement and decumulation, so I need to figure out how to adjust to the idea of maintaining a healthy weight rather trying to attain it. Nice problems to have though. In another commonality with building wealth, losing weight (by which I mean fat) isn't hard, but it's slow and it's boring. The simple chart above shows where I got bored! The longer downward slopes are where I was more focused, and the instance starting around 380 days was when I was laid up in bed with a broken leg - zero alcohol and my wife had total control over my caloric intake - and I couldn't weigh myself daily for 11 weeks.  

Monday 26 February 2024

Another Perfect Final

Betfair's official Starting Price for the League Cup Final between Liverpool and Chelsea yesterday was 3.8, while the 'official' odds I record using the Odds Portal average price was 3.73.


For the Under 2.5 markets, an alternative - lower volatility - way of investing in these selections, the most traded price on Betfair was 2.52 with 2.4 the average on Odds Portal.

A winning result for both investments, with another 'perfect' draw, and the ROI on the last 20 League Cup Finals increases to 56%, and that from the Under 2.5 (only 16 Finals available) to 19% using my conservative numbers which should be easily beatable in practice.  

In the seven Finals without a fair-priced team at odds-on, the Draw has come in five times, an ROI of 148%, and in the 11 "Big 6" Finals, the Draw has won 7 times with an ROI of 133%.

I've updated the Sacred Manuscript and hopefully as well as subscribers, some (if not many) of you followed my advice from last week regarding this match. 

Saturday 24 February 2024

Berkshire Hathaway Annual Letter 2024

The 2024 annual letter to Berkshire Hathaway shareholders was published this morning, and as some readers will know, I both own shares in this company and often comment on the newsletter's contents.


For a traditionally rather boring stock, it's been on something of a tear this year, up 17% already, second only behind my less boring Bitcoin "investment" (+31.7% YTD) in my individual holdings. 
As for the newsletter, unsurprising Warren Buffett opens with a tribute to his longtime partner Charlie Munger who passed away last November just shy of his century, crediting him with being the “architect” of the present Berkshire, while "I acted as the 'general contractor' to carry out the day-by-day construction of his vision."

Buffett introduces a sister, Bertie, and makes an observation about her that many sports bettors would be well advised to heed:
She is sensible – very sensible – instinctively knowing that pundits should always be ignored. After all, if she could reliably predict tomorrow’s winners, would she freely share her valuable insights and thereby increase competitive buying? That would be like finding gold and then handing a map to the neighbors showing its location. 

As he often does, and again readers will know that I have long followed this strategy, he extols the virtue of owning US stocks writing:

I can’t remember a period since March 11, 1942 – the date of my first stock purchase – that I have not had a majority of my net worth in equities, U.S.-based equities. And so far, so good. The Dow Jones Industrial Average fell below 100 on that fateful day in 1942 when I “pulled the trigger.” I was down about $5 by the time school was out. Soon, things turned around and now that index hovers around 38,000. America has been a terrific country for investors. All they have needed to do is sit quietly, listening to no one. 

The index is actually above 39,000 right now, and while I prefer to track the broader S&P 500 Index, I'm sure there will be a lot of articles written when the 40,000 level is reached Started in 1896, it's not quite the OG of indexes, but it's second behind the Dow Jones Transportation Average which started in 1884. 

Buffett is very much a proponent of leaving things alone when they are going well, and talks about the holdings in Coke and American Express that Berkshire Hathaway have held for many years:

During 2023, we did not buy or sell a share of either AMEX or Coke – extending our own Rip Van Winkle slumber that has now lasted well over two decades. Both companies again rewarded our inaction last year by increasing their earnings and dividends. Indeed, our share of AMEX earnings in 2023 considerably exceeded the $1.3 billion cost of our long-ago purchase. 

And of interest to me with my new focus on dividends, Buffett adds:

Both AMEX and Coke will almost certainly increase their dividends in 2024 – about 16% in the case of AMEX – and we will most certainly leave our holdings untouched throughout the year.

The newsletter touches on a variety of topics including climate change, mental health and the challenges of hiring employees in the rail industry and as always, the 17 pages are worth a read in full - it can be found here

The annual review I mentioned yesterday went about as expected given the "financial headwinds" that have been mentioned, presumably to dampen expectations. It was no secret that senior grade levels would not be receiving any merit increases this year, and the bonus was down about £20k from last year with the options and RSUs set the same as 2023.

The tone of the conversation was all rather negative regarding the future and when job cuts were hinted at, I took the opportunity to express an interest in negotiating a voluntary severance package which he will be taking to HR. 

Exciting times. I went out for my daily walk immediately afterwards, always good for processing thoughts and clearing your head, and I felt very positive about everything. With the US S&P 500 later closing at new high and my Royal London pension statement also up, it was a new high again for the personal spreadsheet so it's all good. 

If no agreement on severance can be reached, or no offer is made, it's not a big deal. Given my tenure, I'll get at least six months pay if / when they involuntarily sever me and by the time that date comes around I'll have worked a few more months anyway, and as I've mentioned before, it's very comfortable working from home so that wouldn't be a big deal anyway. 

Friday 23 February 2024

Cups, Major Leagues and 673 Days

weirimdi followed up on his teaser of a comment regarding Cup competitions with some more data and some additional observations.

He wrote: 

Hello again, thank you for responding to my comment in your recent post.
As you suggested I looked at the ROIs of the respective leagues.
Here is a link the screenshot. https://prnt.sc/wAmY8WxJd54D
In addition to that you might want to look up the performance of major leagues in the Champions League when they play as an Away Team.
https://prnt.sc/u5y1fIA954AO
Another interesting angle here is that most of the Home Teams are underperforming. I included Group Stages/Qualifier/Knock Out Stages for CL and for the Cup selections too.

It has the data onwards based on maximum odds from betexplorer.com.
Thanks for the interest!
I might have mention this before, but I happen to love this stuff so thank YOU for the comment. The Cup data shows some interesting returns - Turkey's Cup with an ROI of 15.7% from 2000+ matches for example. 

As for the comment about teams from the major leagues when playing Away in the Champions League, yes I do track this although my idea about the 'major leagues' may differ since the highlighted ones are England, France, Portugal and Spain. 

Here are my numbers for the Big Five Leagues of England, France, Germany, Italy and Spain showing that opposing these teams (back the Home team if they are a Big Five club / back the Draw if not) is generally a good idea: 
More on this topic to come, possibly after the Round of 16 is complete and we have a little more data but - spoiler alert - backing an Away team from Germany, Italy or Spain is generally not a good idea with an ROI of -14%

Japan's Nikkei 225 index made a new high yesterday after 34 years, which is almost as long as the Israelites were wandering about in the wilderness, eating quail and manna. The S&P 500 index also closed at a new high yesterday, after recovering from a two year slump last month, and my own personal drawdown came to an end just shy of two years, (673 days to be precise) since a last high was reached on April 20th, 2022. 

The longest drawdown for my sports investing accounts was a mere 227 days back in 2007 but the mind is a funny thing and in many ways that felt a lot worse. I made a stupid mistake on New Year's Day and lost £5,000, what at the time seemed like a lot of money. As I've written before, it took me until August to recover, but I learned a valuable lesson from my error.

The new high comes at a good time psychologically. I have my annual review later today, and while any merit increase at my age is of little interest to me, I am much more interested in the size of my annual bonus and stock options. Perhaps not as interested as my wife, who has plans for new flooring, showers, cabinets and kitchen...  

With February extended by a day this year, there are still five trading days where it could all go horribly wrong, but I'm hopeful of ending the month at, or close to, a new high.